2022 (9) TMI 632 - AT - Insolvency and Bankruptcy

Seeking to Recall the original order dated 05.05.2022 and to issue a fresh order, appointing the Resolution Professional and directing him to submit a Fresh Report, after affording an opportunity to the Appellant/Applicant - Principles of natural justice - HELD THAT - In view of the fact that the Adjudicating Authority (National Company Law Tribunal, Kochi Bench) has not yet finally arrived at a conclusion, cementing upon the Report of the Resolution Professional, and despite the earlier observation made by the Adjudicating Authority (National Company Law Tribunal, Kochi Bench) in CP(IBC)/24/KOB/2022 dated 05.05.2022 that Debt and Default were proved, yet in the considered opinion of this Tribunal, the Adjudicating Authority (National Company Law Tribunal, Kochi Bench) had provided an opportunity to the Appellant/ Applicant to file a Reply Statement on or before 17.06.2022 and posted the matter on 21.06.2022 For Hearing (vide Order dated 16.06.2022 in CP(IBC)/24/KOB/2022). Also keeping in mind of another fact that the Appellant / Applicant was provided with an opportunity to approach the Resolution Professional in IA/IBC/147/KOB/2022 filed by the Applicant/Appellant, this Tribunal holds that IA/IBC/147/KOB/2022 filed by the Applicant / Appellant was rightly dismissed by the Adjudicating Authority (National Company Law Tribunal, Kochi Bench) on 29.06.2022 by holding that Tribunal has no power to Recall or Review its Order or Decision etc. and opines that it is open to the Applicant / Appellant to file Reply before the Resolution Professional appointed in CP(IBC)/24/KOB/2022 for redressal of his grievances, if he so desires / advised. Application disposed off.

Summary

Issues:
- Jurisdiction of the Adjudicating Authority to recall or review its own order
- Premature conclusion of default by the Adjudicating Authority
- Opportunity provided to the Applicant to file a Reply Statement

Jurisdiction of the Adjudicating Authority to recall or review its own order:
The Appellant filed an Application seeking to recall the original order dated 05.05.2022 passed by the Adjudicating Authority. The Adjudicating Authority dismissed the Application, stating that it had no jurisdiction to recall or review its own order. The Adjudicating Authority emphasized that only rectification of clerical or arithmetical mistakes could be done, and the present Application was viewed as a delaying tactic against the objective of the Code. The Appellant argued that the Adjudicating Authority's order was premature and relied on a judgment to support their claim that the Adjudicating Authority should not conclude default before receiving the Resolution Professional's report.

Premature conclusion of default by the Adjudicating Authority:
The Adjudicating Authority had previously observed default by the Personal Guarantors in not fulfilling the debt owed to the Corporate Debtor. The Appellant contended that this premature conclusion of default could lead to bias or prejudice in the Resolution Professional's report. They argued that the Adjudicating Authority should not have allowed the Petition under Section 95 of the Insolvency and Bankruptcy Code before receiving the Resolution Professional's report.

Opportunity provided to the Applicant to file a Reply Statement:
The Adjudicating Authority provided an opportunity for the Applicant to file a Reply Statement in response to the Resolution Professional's report. Despite the earlier observation of debt and default, the Adjudicating Authority allowed the Applicant to file a Reply Statement and scheduled a hearing. The Tribunal held that the dismissal of the Applicant's Application was appropriate, as the Adjudicating Authority had provided an opportunity for redressal through the Resolution Professional.

In conclusion, the Tribunal disposed of the matter, stating that the Adjudicating Authority had acted within its jurisdiction in dismissing the Application and providing an opportunity for the Applicant to address grievances through the Resolution Professional. The Tribunal emphasized that the Adjudicating Authority should not recall or review its own order and that the Applicant could file a Reply before the Resolution Professional for redressal.